A map of Philippine poverty (a second look)

Map Insights
Rolando T. Dy

Posted on April 22, 2014

THE LATEST poverty report of the National Statistical Coordination Board (NSCB), now part of the Philippine Statistical Authority, showed that in 2012, some 25.2% of Filipinos were poor, or 23.7 million people. This meant that they fell below the poverty threshold of about P19,000 to P20,000 per capita per year. Assuming a family size of five, the total income needed to move out of poverty would be P95,000 to P100,000 per family per year.

What about the distribution of the poor? Metro Manila had a poverty incidence of only 3.9% in 2012, or only 461,000 people out of 11.8 million. The “less poor” regions (those with less than 20% poverty) are in Ilocos, Cagayan Valley, Central Luzon and Calabarzon. The rest of the regions and their component provinces have poverty incidence of over 25%.

Are there provinces that can compare with the poverty incidence of Malaysia (less than 10%) or that of Thailand and Vietnam (10% to 20%)?

• The rich provinces. There were eight provinces with less than 10% poverty incidence in 2012. These provinces were, from north to south: Benguet 3.7%, Ilocos Norte 9.9%, Bataan 7.1%, Bulacan 7.3%, Pampanga 7.6%, Cavite 3.4%, Laguna 6.4%, Rizal 6.1%.

I have not done thorough analytics. But most of these provinces have a dominance of non-farm jobs. Benguet is the seat of Baguio City, a vegetable zone but also a tourist area. Bulacan, Cavite, Laguna, and Rizal are partly industrialized, and/or partly bedroom communities. In other words, many families have full-time jobs. The eight provinces had a total population of 16.3 million in 2012, or about half the size of Malaysia. These are the “islands of prosperity” in a “sea of poverty.”

• The middle class provinces. There are six provinces belonging to this league with poverty incidence ranging from 10% to 20%. They are: Ilocos Sur 17.3%, La Union 18.5%, Cagayan 19.7%, Tarlac 16.6%, Zambales 16%, and Batangas 19%. The total population of the six provinces: 6.9 million in 2012.

Now, what is so different with Ilocanos that despite their distance from non-farm job opportunities near Manila, they are less poor? Do they rely on highly productive agriculture and foreign remittances? Farms in Ilocos are mostly one hectare or less.

• The poor provinces. All the other 64 provinces have quality of life below their ASEAN peers. The poverty incidence ranges from 20.9% in Nueva Vizcaya to 63.7% in Eastern Samar to 73.8% in Lanao del Sur. The total population of the 64 provinces was about 59 million in 2012, of which 21 million were poor, or 35.5% poverty incidence. In other words, the bottom “64” host some 89% of all poor.

The total poverty incidence of the 64 provinces is higher than Cambodia’s and India’s (22% each) at their respective national poverty lines, Uganda’s 24.5%, Bangladesh’s 31.5% while closer to Ethiopia’s (33%).

This high poverty incidence is a legacy of many administrations. It is also a result of urban-bias in public investments by the ruling elite. It is good news that the present government has moved towards poverty-targeting of poor areas. It has also expanded its conditional cash transfer program.

Sadly, even the so-called agribusiness centers of Davao, Northern Mindanao and Central Mindanao have their share of the poor. Bukidnon had a poverty incidence of 49%, Davao del Norte 33.4%, and South Cotabato 32%. They had a combined population of 3.7 million, of which 1.4 million, or 38%, were poor. This could mean that many are dependent on seasonal agriculture work and less on regular rural enterprise jobs.

There are modern farm systems in these places that provide regular jobs, but they are a minority. There are less than 200,000 hectares of banana, pineapple, sugar and oil palm in the three regions, or less than 10% of total farm land of 2.3 million hectares.

What could be the common denominator of these provinces? They are mostly agriculture and fishery-dependent. They are characterized by small subsistence farms.

Overall farm productivity of rice, corn and coconut is low. There is heavy dependence on the said crops which, at current technology, do not require more labor.

In past decades, little could be said about crop diversification. Few investments have been made in farming and in processing agriculture and fishery products as there is an inadequate supply of raw materials coming from the farms. As a result, there is a shortage of productive non-farm work in rural areas that can absorb excess rural labor.

Rural poverty incidence, according to official data, was about 36.7% for farmers and 41.4% for fishermen in 2009, as compared to 35% and 37%, respectively in 2003. There is no separate poverty incidence measure for coconut farmers, among the largest poverty groups. Not measured is the poverty incidence of millions of landless peasants or those with very small farms. In 2002 (latest census), 40% of the farms were below one hectare, while 20% were below one-half hectare. It is extremely tough to earn a decent income from these small farm sizes. That is why non-farm job creation is imperative.

Unless agriculture and fishery become productive and diversified, and more private and public investments pour in, the 25.2% poverty incidence in 2012 will not budge in 2016. Realistically, agriculture investments have long gestation periods. That is why program focus and management continuity are strategic imperatives.

In addition, the urban bias of public investments must change. The LRT-MRT system reportedly subsidizes the 1.1 million daily riders to the tune of more than P12 billion annually, or P11,000 per person. By contrast, the already enhanced budget for 2014 for the 1.8 million poor fishermen is P4.2 billion or P2,300 per fisherman; and for some 3 million poor coconut farmers/workers, P2 billion, or P700 (National Statistics Office, budgetngbayan.com and National Anti-Poverty Commission). The city governments also receive large internal revenue allotments.

With fiscal space and sound project selection and execution, rural poverty can be licked in time.

(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines {MAP}. The author is the Chair of the MAP Agribusiness and Countryside Development Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific. Send feedback to mapsecretariat@gmail.com and rdyster@gmail.com. For previous articles, visit map.org.ph.)